Something stinks in that jobs report

The February jobs report was not only good, it exploded to the upside, with 295,000 jobs added to nonfarm payrolls. But this report raises many questions.

First, it was well ahead of even the most optimistic estimate of 250,000 jobs created, which should make you question its validity, considering that it runs completely counter to the most recent macro data.

Tom Brakefield | Getty Images

Now, to be fair, there was one labor-market indicator that showed improvement — service PMI employment, which rose to 56.4 from 51.6. Meanwhile, manufacturing PMI fell, ADP employment was weaker than expected, initial jobless claims surged, ISM New York Employment fell and Chicago PMI Employment suffered double-digit losses.

Never mind that soft retail sales are causing retailers to "manage costs" (read, " layoffs") and lower oil prices are causing layoffs across the board in many of the energy names. Never mind that the labor-force participation rate is now back at its lows.

Forget the fact that the exceptionally cold weather and abnormal number of winter storms experienced during the month of February had all of these analysts calling for a surprise to the downside — which would have been much more logical. This surge? Not so much. So you can imagine the surprise by investors and traders when the government reported such a strong headline number. What happened to the snow — or is this in fact a real "snow job?"

In the end, this report — like all the others — will be evaluated through the rose-colored glasses of the Federal Reserve. Remember that, while the total number of jobs created is always the headline number, it is the quality of jobs that are created that is really the deciding factor. In this case, size (quantity) apparently does matter — at least until they dissect it. We are supposed to believe that the U.S. economy shook off the brutal winter and went on a hiring spree — and I ask, where exactly did we do all this hiring? And then, what happened to wages? Traders/investors should be focusing on average hourly earnings and if there is pressure on wages, today that pressure was quoted at 0.1 percent -- below expectations. In fact, it was weaker, so if you believe the Fed by that measure alone, rates should not be moving. So, why are hawks circling?

Think of yourself and your community. Think of the number of empty storefronts that you still see. Think of how many friends, neighbors and family members are still struggling to make ends meet. Think of where your wages have gone in the past 7 years. And think of the 11-percent underemployment rate that no one wants to recognize or talk about.

I call bull…. And I don't think the market believes it either. Because if the economy was as strong as they make it out to be and if you accept the report for what it is, a quarter-point increase in rates no matter when it happens should not disrupt the "strong, robust" economy that the jobs report implies.

Something stinks.

Commentary by Kenny Polcari, director of NYSE floor operations at O'Neil Securities. He is also a CNBC contributor, often appearing on "Power Lunch." Follow Kenny on Twitter @kennypolcari and visit him at kennypolcari.com.

Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities or its affiliates.